The Other Taxation: An Ethnographic Account of “Off-the-Books” State Financing

Abstract

This article contends that previous research has failed to consider resources that are systematically collected by way of informal taxation and channeled to support the provision of public services. Drawing on extensive ethnographic fieldwork in the markets for stolen auto parts and counterfeit clothing in Greater Buenos Aires, this article describes how state agencies informally tax these economies, and “follows the money” extracted. While a portion of these resources does end up in private pockets, the article shows that a greater share of the resources are directed toward enhancing state performance: welfare programs, everyday police duties, and political activities. An analysis of informal state financing schemes helps us to understand a state’s true capacities and its structural transformation over time.